American Bitcoin Raises $220 Million for Bitcoin Mining Expansion

American Bitcoin, a majority-owned subsidiary of crypto mining firm Hut 8, has successfully raised $220 million through a private placement. The funds will be used to purchase Bitcoin mining equipment and to strengthen the company’s Bitcoin treasury. The private placement involved the issuance of 11 million shares, with gross proceeds amounting to $220 million. Notably, $10 million worth of shares were sold for Bitcoin instead of cash, with the average cost of acquisition standing at $104,000 per coin. This strategic move highlights the company's commitment to increasing its Bitcoin holdings and leveraging its cryptocurrency assets.

As of June 10, American Bitcoin’s Bitcoin treasury stood at 215 Bitcoin. This significant fundraising effort underscores the growing interest and investment in the Bitcoin mining sector. The firm has ties to the Trump family, as former U.S. President Donald Trump’s sons, Donald Trump Jr. and Eric Trump, were among the founders of American Bitcoin. Hut 8 acquired a majority stake in the firm on March 31, further solidifying its position in the cryptocurrency market.

Hut 8 is also expanding its operations by opening an office in Dubai. The purpose behind this expansion is to trade cryptocurrencies and accumulate digital assets. The company was registered with the authorities on June 23 under Hut 8 Investment Ltd. Hut 8 CEO Asher Genoot stated that the company’s Dubai expansion will “enhance the precision and efficiency of Hut 8’s capital strategy.” The UAE has become a hub for crypto startups in recent years due to its favorable crypto regulations and taxation structure. However, crypto startups still need to lay out a legal strategy to avoid missteps and comply with local regulations. The new Dubai office has no ties to American Bitcoin.

In May, it was announced that American Bitcoin would go public by merging with Gryphon Digital Mining, a crypto-mining company listed on the Nasdaq exchange. The deal will be conducted via a stock swap, with the new entity using the American Bitcoin brand. Eric Trump will be on the board post-merger. Under the new structure, existing shareholders of American Bitcoin will hold 98% of the newly formed entity. Hut 8 will continue to oversee the operational activities of the newly formed venture. This development highlights the firm's proactive approach to capitalizing on the opportunities presented by the cryptocurrency market, leveraging its connections and strategic investments to drive growth and innovation.